Local Tax Reform

During my travels throughout the 48th Senatorial District, I hear a persistent drumbeat:  “eliminate school property taxes” – not partial elimination or reduced school property taxes – total elimination.

That’s why I’ve joined with Senator Argall to fight for Senate Bill 76 to eliminate school property taxes.  In 2015, the Senate fell one vote short: 24-25.

This isn’t the first time we’ve been down this road.  Other plans have been offered to reduce property taxes and some have become law.  However, none have totally eliminated school property taxes as proposed by SB 76.

Act 511 was passed in 1965 to reduce both school and municipal property taxes through a myriad of other taxes, which proved to be equally unpopular and were changed or repealed over the years while school property taxes continued to rise.

In 1987, Governor Casey and the General Assembly sent a bipartisan tax mixture to the voters that was overwhelmingly rejected by the voters statewide by a margin of over four-to-one.

During the Rendell Administration, gaming was promised to reduce property taxes by a minimum of 20 percent.  Today, we have both gambling and school property taxes.

Every plan to eliminate school property taxes faces the same challenge:  finding nearly $14 Billion in replacement revenues.  It’s a big number – nearly half the total state budget.  But it’s the amount needed to eliminate school property taxes.  And, there are just four basic options to raise $14 Billion in replacement revenues:  Personal Income Tax (PIT), Earned Income Tax (EIT), Sales & Use Tax, and/or some other, new tax.

Under SB 76, the Sales Tax would be broadened and expanded to 7% and the Personal Income Tax would be increased from 3.07% to 4.95%.  Not only does this totally eliminate school property taxes, it’s fair because people have some control over paying the Sales Tax – a consumption tax.  For each $1,000 you now pay in school property taxes, you would need to spend $14,285.71 in newly taxable items before it would cost you more.

SB 76 also gives schools the ability to raise revenues through either a locally imposed Personal Income Tax or an Earned Income Tax – after voter approval.

SB 76 also succeeds where other plans have fallen short because more people pay Sales and Personal Income taxes than those paying property taxes.  Plus, the Sales and PIT are paid over time while property taxes are often a big sum paid at one time.

Home ownership is a fundamental principle within the Declaration of Independence and the US and Pennsylvania Constitutions.

Article I, Section 1 of Pennsylvania’s Constitution, “Inherent Rights of Mankind,” states:  “All men are born equally free and independent, and have certain inherent and indefeasible rights, among which are those of enjoying and Defending life and liberty, of acquiring, possessing and protecting property and reputation, and of pursuing their own happiness.”

I don’t think any tax should have the power to leave you homeless.

Senate Bill 76 changes the status quo by replacing existing school property taxes – dollar-for-dollar – with revenues from the expanded Sales and Personal Income taxes.

Opponents of SB 76 have raised two main objections:  the numbers don’t work and it’s technically flawed.  I’m proud to have worked with Senator Argall to address both of these issues – and correct them.  SB 76 works.  The numbers add up.  It’s technically correct.

Do you support the proposed changes of Senate Bill 76 or do you prefer the status quo?  For those who oppose SB 76, I say:  show us your plan.  Until then, you’re supporting the status quo, which isn’t working for either taxpayers or schools.